A recent press release from the California Department of Insurance warned that on Superbowl Sunday more auto crashes occur that any other Sunday. Throughout California, there is a 77% increased risk of an alcohol-related fatal or injury crash this day.

We encourage you to plan ahead if you will be attending a party or watching the game at a restaurant or bar. A designated driver would be a good idea. Alternatively, you could plan to use the Uber or Lyft services.

Many times, we encounter customers that think they can use their vehicle in business and cover it with a personal auto policy. That is only sometimes true, depending on the particular type of business.

Differences between Personal and Business Auto Insurance

Some personal auto policies expressly exclude coverage for “business use” of vehicles. This might seem to be unfair from the standpoint that a car is a car and it shouldn’t matter why one is driving the car. However, again depending on the business, how you use that vehicle could make a big difference in the likelyhood that you will have an accident.

Delivery

Delivery drivers contend with multiple stops and tight schedules. This dramatically increases the odds of an accident and is clearly the job for a business auto policy.

Specialized Equipment

Vehicles that have specialized equipment, such as utility beds for tool storage, are more likely to be excluded from a personal auto policy.

Employees

If you have employees, a Business Auto policy would definitely be required.

Multiple Vehicles

Other concerns might be the number of vehicles in use by the business. If there are multiple vehicles a business auto policy may be a better choice. For businesses that have a lot of vehicles a business auto policy can be written on a blanket (All Autos) basis to simplify things.

Incidental Uses

At the other end of the spectrum would be a real estate agent using their car to drive potential customers to see homes. This is also a business use however on some policies that would be acceptable as an “incidental business use”.

Cost

The cost of a business auto policy is not always as big a problem as people fear. Often times, we are surprised at how close the pricing of a business auto policy is to the personal auto policy it is replacing.

The best option is to discuss with us your particular business and how it uses vehicles and, if needed, have us provide a business auto quote to compare.

Work Comp this year has been quite a challenge. Increases in premium have been rather prevalent for our clients. In some cases, we’ve found it advantageous price-wise to move some clients to the State Fund (SCIF). Although SCIF is supposed to be the insurer of last-resort, we’re also seeing cases where they are also the least expensive.

Other Trends

California has the highest Work Comp rates of any states as of January, 88% higher than the median rates of the nation.

California is in the top 3 states in medical costs per claim.

Experienced double-digit increases in premiums over the last two years and more increases were filed for 2015 of 1.5% to 9.8%.

High frequency of claims relative to payroll. Los Angeles county is the worst in this regard.

Legislation

SB 863, which was intended to address some of the causes of the increases in cost, was signed into law on Sept 18, 2012. A recent panel was divided as to whether or not the reforms have been successful. Some costs have seen reductions while other have not.

Articles

The current state of California workers’ compensation and a look forward

If you look at most of the advertisements for contracting services, the words “Licensed and Bonded” are frequently used. The intent is to give you, the consumer, a feeling of comfort. After all, if something does go wrong they are bonded, right? Not so! The bond that contractors have is called a Contractors License Bond. It allows the license board to more easily collect any fine they might issue to a contractor. It does absolutely nothing for the consumer who hired him.

So if the contractor you hire leaves debris around and someone trips and falls, who is liable? If that contractor has employees and one gets injured, who is liable? I’m not an attorney but I do know that property owners are typically responsible for what happens on their property.

So, what should you do? Use only contractors that are insured.

You should insist on getting a certificate of insurance from that contractor’s agent or broker. Have the certificate sent to you directly by that agent or broker. We’ve seen some contractors actually alter an old copy of their certificate to look like their insurance was still in force.

The California Department of Insurance recently released a statement regarding a program to check contractors for licensing, insurance and safety. Essentially, individual cars with employees from 4 different agencies (DOI, CSLB, EDD, OSHA) are checking job sites, including individual homeowners, to confirm that the contractors working there are licensed, have insurance, are filing their payroll taxes, and are conducting their work safely. On one day at the end of August, they issued over $136,000 in fines.

Bottom line(s):

Homeowners should be aware they can be held responsible for any injuries that occur on their premises, even if the injured person is an employee of the contractor.

Contractors that have been avoiding the expense of insurance might want to reconsider since it looks like “going without” is going to become much more expensive.

“The BuildFax Residential Remodeling Index was at 130.4 in July, up from 129.5 in June. This is based on the number of properties pulling residential construction permits in a given month…This is the highest level for the index (started in 2004) – even above the levels from 2004 through 2006 during the home equity (“home ATM”) withdrawal boom.”